Services

Results

Profitability remains at a high level

As in previous years, one-off costs related to the Sanitec acquisition and integration had an impact on the Geberit Group’s results in 2017. For better comparability, adjusted figures are shown and commented on.

The adjusted operating cashflow (adj. EBITDA) rose by 3.2% to CHF 820.7 million, its highest ever level in
Geberit’s history. The adjusted EBITDA margin came to 28.2%, which was almost the same as the previous
year’s figure of 28.3%. Increased sales volumes and a positive product mix effect had a positive impact on
the operating results, as did synergies from the Sanitec integration. Higher raw material prices and
increased personnel expenses were among the more adverse factors. Foreign currency developments did not have
any material impact on the adjusted EBITDA margin.

The adjusted operating profit (adj. EBIT) rose by 2.9% to CHF 706.1 million, and the adjusted EBIT margin
reached 24.3% (previous year 24.4%). Adjusted net income improved by 3.5% to CHF 604.2 million, which led to
an adjusted return on sales of 20.8% – a figure that remained unchanged year-on-year. The adjusted earnings
per share were up by 3.7% to CHF 16.43 (previous year CHF 15.85). This above-average increase when compared
with the operating results is explained by a financial result on a par with the previous year, a lower tax
rate as well as a slightly smaller number of shares.

EBIT, EBITDA, Net income, Earnings per share (EPS) 2015–2017

(in CHF million)
(EPS: in CHF)

* Adjusted for costs in connection with the Sanitec acquisition and integration

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EUR/CHF exchange rates
2016/2017

(Period-end exchange rates)

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Operating expenses under control

The adjusted cost of materials increased by 7.2% to CHF 829.1 million, representing a higher share of net
sales at 28.5%,
compared to 27.5% in the previous year. The higher cost of materials was driven by continuous rises
throughout the year in the
price of industrial metals on the one hand and plastics on the other. Adjusted personnel expenses grew by
1.6% to CHF 707.6 million,
which equates to 24.3% of net sales (previous year 24.8%). This increase in absolute terms was attributable
to tariff-related salary
increases as well as the higher personnel expenses needed for handling greater volumes, partly offset by
synergies and efficiency-enhancing measures (see also Business and financial review, employees).
Adjusted depreciation rose disproportionately by 5.3% to CHF 105.0 million (previous year CHF 99.7 million)
due to the commenced operations of the expanded logistics centre in
Pfullendorf (DE). The adjusted amortisation of intangible assets amounted to CHF 9.6 million (previous
year CHF 8.7 million). Adjusted other operating expenses increased by 1.2% to CHF 550.9 million.

Raw material price development

(Market price; index: December 2012 = 100)

1 Source: Kunststoff Information Verlagsgesellschaft mbH

2 Source: London Metal Exchange

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The net financial result came to CHF -9.4 million, matching the previous year’s performance (CHF -9.3
million). Tax expenses grew from CHF 82.6 million to CHF 84.9 million. This resulted in a tax rate of 13.9%
(previous year 13.1%).

Acquisition and integration costs continue to have a negative impact
on the income statement

The negative special effects (see table below) arising from the Sanitec acquisition and integration amounted to CHF 49 million as regards EBITDA, CHF 84 million as regards EBIT, and CHF 77 million as regards net income. CHF 45 million in costs recorded in the second quarter of 2017 in relation to the closure of two ceramics
production plants in France had a significant impact on these figures. The non-adjusted figures were CHF 772.0 million for EBITDA, CHF 621.7 million for EBIT, CHF 527.4 million for net income, and CHF 14.34 for
earnings per share.

Acquisition and integration related costs

(in CHF million)

2016

2017

Integration costs

10

49

Total cost on EBITDA level

10

49

Depreciation and amortisation

36

35

Total cost on EBIT level

46

84

Tax effect

-10

-7

Total cost on net income level

36

77

Decline in free cashflow

Unlike non-adjusted operating cashflow (EBITDA), net cashflow increased slightly despite higher cash tax
payments. This is because a significant number of the costs included in EBITDA in relation to the closure of two ceramics plants in France are still to be paid. Higher investments in property, plant and equipment and negative effects of the change in net working capital resulted in a decline in free cashflow of 13.2% to CHF 483.4
million (see also Financial Statements of the Geberit
Group, Notes to the Consolidated Financial Statements, 28. Cashflow figures).
Free cashflow was used to pay distributions of CHF 368.4 million to shareholders, to repay debts of net CHF 137.3 million and to buy back shares for CHF 91.8 million.